International law regards the West Bank and East Jerusalem as territories occupied by Israel, and, although it has withdrawn its settlements and military forces, Israel continues to be designated the occupying power in the Gaza Strip by the United Nations, the United States, the United Kingdom and various human rights organizations.[36][37] The final status of the Palestinian Territories as an independent state is supported by the countries that form the Quartet's "Road map for peace". The government of Israel has also accepted the road map but with 14 reservations.[38]

Customary international law, including the Fourth Geneva Convention, prohibits Israel (as an occupying power) from establishing settlements in occupied territory.[39] This was reaffirmed December 5, 2001, at the Conference of High Contracting Parties to the Fourth Geneva Convention. The participating High Contracting Parties called upon Israel "to fully and effectively respect the Fourth Geneva Convention in the Occupied Palestinian Territory, including East Jerusalem, and to refrain from perpetrating any violation of the Convention. They reaffirm the illegality of the settlements in the said territories and of the extension thereof."[36] Israel contends that the settlements are not illegal and the occupation is not illegal, and views the territory as being the subject of legitimate diplomatic dispute and negotiation under international law.[40][41] However, Article 47 of the Fourth Geneva Convention prohibits any change of status in occupied territory concluded through negotiations between the occupying power and local authorities under occupation. Critics point out that implementation of the Oslo Accords has not improved conditions for the population under occupation.[42]

East Jerusalem, captured in 1967, was unilaterally annexed by Israel. The UN Security Council Resolution 478 condemned the annexation as "a violation of international law". This annexation has not been recognized by other nations, although the United States Congress declared its intention to recognize the annexation (a proposal that has been condemned by other states and organizations). Because of the question of Jerusalem's status, no states base their diplomatic missions there and treat Tel Aviv as the capital.[43] Israel asserts that these territories are not currently claimed by any other state, and that Israel has the right to control them.

Israel's position has not been accepted by most countries and international bodies, and the West Bank, East Jerusalem, and the Gaza Strip are referred to as occupied territories (with Israel as the occupying power) by most international legal and political bodies,[44] the rest of the Arab bloc, the UK,[45] including the EU, the United States,([4], [5]), both the General Assembly and Security Council of the United Nations,[46] the International Court of Justice, the Conference of High Contracting Parties to the Fourth Geneva Convention,[47] and the Israeli Supreme Court (see Israeli West Bank barrier).